AUBURN HILLS, Mich.,
Oct. 30, 2019 /PRNewswire/
-- BorgWarner today announced that it has divested BorgWarner
Morse TEC LLC ("Morse TEC"), a wholly-owned subsidiary of the
company that holds asbestos and certain other liabilities, to
Enstar Holdings (US) LLC, a subsidiary of Enstar Group Limited. In
connection with the closing, BorgWarner contributed approximately
$172 million in cash to Morse
TEC.
"Enstar is a leading player in managing legacy liabilities and
has specific expertise in asbestos," said Frédéric Lissalde,
BorgWarner President and CEO. "This reflects our company's strategy
to eliminate or reduce exposure to legacy non-operating liabilities
and to actively manage and deploy capital."
Enstar's team of experts will assume the operational management
team of Morse TEC. This includes the management of all of Morse
TEC's asbestos claims and collection of existing insurance
policies.
As a result of the transaction, BorgWarner expects to remove the
asbestos obligations, related insurance assets and associated
deferred tax assets from the company's condensed consolidated
balance sheet. The company is evaluating the accounting for this
transaction, but currently estimates that this transaction could
result in an after-tax loss in its consolidated financial
statements of up to $40 million in
the fourth quarter of 2019.
About BorgWarner
BorgWarner Inc. (NYSE: BWA) is a
global product leader in clean and efficient technology solutions
for combustion, hybrid and electric vehicles. With manufacturing
and technical facilities in 67 locations in 19 countries, the
company employs approximately 30,000 worldwide. For more
information, please visit borgwarner.com.
Statements in this press release may contain forward-looking
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Litigation Reform Act that are based on management's current
outlook, expectations, estimates and projections. Words such as
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"effect," "estimates," "evaluates," "expects," "forecasts," "goal,"
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statements are subject to risks and uncertainties, many of which
are difficult to predict and generally beyond our control, that
could cause actual results to differ materially from those
expressed, projected or implied in or by the forward-looking
statements. These risks and uncertainties, among others, include:
our dependence on automotive and truck production, both of which
are highly cyclical; our reliance on major OEM customers;
commodities availability and pricing; supply disruptions;
fluctuations in interest rates and foreign currency exchange rates;
availability of credit; our dependence on key management; our
dependence on information systems; the uncertainty of the global
economic environment; the outcome of existing or any future legal
proceedings, including litigation with respect to various claims;
and future changes in laws and regulations, including by way of
example, tariffs, in the countries in which we operate, as well as
other risks noted in reports that we file with the Securities and
Exchange Commission, including the Risk Factors identified in our
most recently filed Annual Report on Form 10-K/A. We do not
undertake any obligation to update or announce publicly any updates
to or revision to any of the forward-looking statements.
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SOURCE BorgWarner